New York Times Faces an Uphill Battle with Paywall

By Don Irvine —— Bio and Archives March 19, 2011

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After nearly fourteen months of planning the New York Times announced this week that starting on March 28th visitors to the paper’s website will be facing potential charges for access to its content. For the very occasional reader ( less than 20 articles per month) the charges will never kick in. But once a reader hits the 21st article they face a plethora of choices.

The basic package will be $15 every four weeks or $195 per year for access to the site and a mobile phone app, $20 for access and an iPad app ($260 a year) or $35 for the all-access plan ($455 year). Home delivery subscriber will receive unlimited access across all digital platforms except for e-readers. That might just be enough to cause many of the 32 million unique monthly visitors in the U.S. and Canada to rethink where they get their news in the future and that wasn’t lost on Times chairman Arthur Sulzberger, Jr. who told employees:

“This move is an investment in our future,” he said. “It will allow us to develop new sources of revenue to support the continuation of our journalistic mission and digital innovation, while maintaining our large and growing audience to support our robust advertising business. And this system is our latest, and best, demonstration of where we believe the future of valued content — be it news, music, games or more — is going.”

It’s really more of a bet on the future than an investment since the paper has already spent tremendous sums of money on their digital properties without monetizing most of them at this time. While they have tried to set up what they see as reasonable charges for their content, experienced online users may cringe at the notion of paying by the month and not having a discounted yearly rate available to them. Also at these price points the Times is seeking to break the $9.95 barrier that most online users are willing to pay for almost any type of content. The Times though was left with little choice as it has seen both its advertising revenue and circulation of the print paper fall dramatically over the last few years putting a serious dent in the company’s revenues. Remember the last time the paper tried to charge for content? They put many of its columnists behind a paywall and it was a disaster. The effort only garnered $10 million and made both readers and columnists angry. The assumption here is that this new effort will rake in substantially more, but how much remains to be seen. After all the Times isn’t the only game in town when it comes to general news and there really isn’t a successful model to compare them to in this area. The Financial Times and the Wall Street Journal stand alone as the models for success in attracting large amounts of digital revenue but since they are business publications they are gathering their revenue mostly from corporations and business people who see them as must-read publications. That isn’t the case with the Times. If there is one advantage to the myriad of pricing schemes it’s that they are all cheaper than a 7-day home delivery subscription of the paper which the last time I checked cost well over $700 a year. For me the solution was to switch to a Kindle subscription for less than $250 a year giving me the news and portability without the ads. I still read and visit the website when I want to share interesting stories with my friends but now I will switch to going through Facebook and Google which will give me 5 articles per day versus the 20 per month of going directly to the website. That loophole alone could kill the pay model. We’ll just have to wait and see.